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EUR/USD And GBP/USD Bounce Off Resistance Levels; USD Stronger

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Dear Traders,

Positive developments in Washington and hopes that the U.S. tax reform bill could pass the House have been supportive for the U.S. dollar. The greenback advanced against the euro and British pound, driving both EUR/USD and GBP/USD towards important support levels. The U.S. Senate adopted a fiscal 2018 budget resolution on Thursday that House GOP leaders agreed to accept.

On the flipside, the euro received no support from political developments in Spain. Madrid is finalizing plans to take control of Catalonia and to suspend the region’s autonomy. This step should keep the political situation in Spain tense.

The pound fell on disappointing U.K. data and speculation that the upcoming Bank of England rate hike could be a one-off. The BoE is forecast to hike rates on their next monetary policy meeting on November 2 but analysts doubt that there could be more than one rate increase in the medium-term. For the time being, we expect the pound to trade with volatile swings between 1.3250 and 1.30. As mentioned in yesterday’s analysis, for bearish momentum to accelerate the pound will have to break the 1.31-support significantly.

EUR/USD: As expected, the resistance level at 1.1850/60 has proved correct and the euro tested this barrier before reversing some of its gains. We now expect the pair to trade lower and focus on targets at 1.1770 and 1.17.

There are no major economic reports scheduled for release today. Fed Chair Janet Yellen is scheduled to hold a speech today but since this speech is only due after markets close, it will not affect the price action.

We wish you good trades and a nice weekend.

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GBP/USD Trends Lower But Prepare For Pullbacks

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Dear Traders,

U.S. President Donald Trump’s tax-plan announcement had little impact on the market as it foreshadows an uphill battle in U.S. Congress. While Trump said the tax-cut plan was aimed at helping working people and making the tax code fairer, there is concern about the budget deficit. The plan contained only few details on how to pay for the tax cuts without expanding the budget deficit and adding to the nation’s amount of debt. The plan must be turned into legislation and investors are still skeptical that Congress could approve a tax bill in the near future.

The U.S. dollar slightly extended its climb against the euro and British pound as market participants raised their expectations for one more Federal Reserve rate hike this year. The priced-in probability of a December rate hike is now 70 percent.

Traders should keep an eye on the U.S. GDP figures, due for release at 12:30 UTC. In case of a surprise we will see more volatile fluctuations in the USD crosses.

GBP/USD

The British pound extended its slide and fell below 1.3380. However, the dip below that support level was not sufficient to increase bearish momentum and we now expect the pair to find some support around 1.3350. Looking at the 4-hour chart we see the Relative Strength Index (RSI) approaching oversold territory. This situation may encourage buyers to take long positions above 1.3340. If the pound climbs back above 1.3430 we could see a run for 1.35.

Traders await a speech of Bank of England Governor Mark Carney at the BoE Independence conference at 8:15 UTC. If Carney raises rate hike expectations the pound could quickly recover from its lows.

The euro continued its short-term downtrend and fell towards 1.17. As stated in yesterday’s analysis we expect a stronger support coming in between 1.1710 and 1.1680. Buyers of the EUR/USD should now wait for prices above 1.1825 in order to buy euros towards 1.19.

Daily Forex signals:

Additional daily and long-term entries are available for subscribers.

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We wish you good trades and many pips!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2017 Maimar-FX.

www.maimar.co

U.S. Dollar Strengthens, Trump Tax Plan Back In Focus

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Dear Traders,

The U.S. dollar strengthened against its major counterparts as comments from Federal Reserve Chair Yellen and President Trump bode well for some renewed upward momentum in the greenback. Yellen boosted expectations for a rate hike in December, saying the Fed “should be wary of moving too gradually” in its rate hike cycle. The Fed does not want to surprise markets when raising rates earlier than expected and while the probability of what the market is currently pricing in is still a little bit too low, Yellen seeks to prepare markets for another rate increase this year.

Moreover, the greenback received some boost from Trump’s comments on the long-awaited tax plan. Recent comments included lowering the corporate tax rate to 20 percent from 35 percent while the individual tax rate should be lowered to 35 percent. However, full details of the tax plan have yet to be revealed. Trump is expected to announce his tax overhaul plan today during a speech in Indiana.

Furthermore, U.S. Durable Goods Orders are scheduled for release at 12:30 UTC but this report is not expected to have a major impact on the USD.

From a fundamental perspective, the dollar trade might be preferable now but traders should also pay attention to the technical picture in order to confirm the current forecast.

EUR/USD

The euro dropped below an important support area at 1.1830-1.18. As long as the pair remains well below 1.1830, we expect further losses towards 1.1730 and possibly even 1.1680. For the euro to regain some strength it would need a renewed break above 1.1865 and further 1.19. A resistance is seen at around 1.1970.

The British pound was able to hold above 1.34. If GBP/USD breaks below 1.3380 we anticipate further losses. A current resistance is however seen at 1.3550.

Daily Forex signals:

Additional daily and long-term entries are available for subscribers.

View our daily signal alerts https://www.maimar.co/category/daily-signals/

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We wish you good trades and many pips!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2017 Maimar-FX.

www.maimar.co

Can The Euro Hold Onto Its High Price Level?

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Dear Traders,

The euro broke above Monday’s spike high at 1.0923 but gains were capped at 1.0950, at least for the time being. The question now is whether there is still room for further gains. Looking at the 4-hour and daily chart we see that the EUR/USD is in overbought territory, a situation that increases the likelihood of upcoming corrections. We see a next hurdle at around 1.0970 followed by a stronger resistance at 1.10. As long as the euro remains firmly below 1.10 we prepare for corrective movements towards 1.09, 1.0840 and possibly even 1.0750.

The British pound rose towards the upper bound of its recent sideways trading range but still refrained from an upside break above 1.2850. As noted in previous analysis, sterling bulls better wait for a significant break above 1.2860 in order to buy pounds towards 1.30. A break below 1.2730 however, could send the pound tumbling towards 1.2650.

There are no major economic reports scheduled for release today, so the price action could hinge on U.S. President Trump’s tax-reform speech. Trump is expected to unveil a tax plan that includes a cut of the corporate rate to 15 percent from 35 percent. If he delivers we could see some renewed strength in the U.S. dollar.

Daily Forex signals:

Additional daily and long-term entries are available for subscribers.

View our daily signal alerts https://www.maimar.co/category/daily-signals/

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We wish you good trades and many pips!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2017 Maimar-FX.

www.maimar.co

 

Market Returned To Risk-Off Mode

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Dear Traders,

Risk appetite among market participants has subsided following the risk-on rally in the wake of French elections. While we had hoped for some further momentum in the markets, traders were disappointed by the poor market situation and consequently none of our daily signal entries was triggered. We may see some increase in volatility as soon as tomorrow as investors are turning their attention to U.S. President Trump who will unveil his tax plan on Wednesday. According to a White House official, he will call for cutting taxes for individuals and lowering the corporate rate to 15 percent. Trump’s announcement could strengthen the U.S. dollar.

The euro traded sideways within a tight trading range between 1.0880 and 1.0835. We are now looking for small breakouts either above 1.0880 or below 1.0845. However, with market participants pulling back on EUR/USD positioning we have no other choice than waiting for the market sentiment to improve.

The British pound refrained from showing any larger price fluctuations and remained steady above 1.2770, at least for the time being. A current support level is seen at 1.2745 whereas a short-term resistance remains intact at 1.2830/40.

U.S. Consumer Confidence is scheduled for release at 14:00 UTC and is the only noteworthy report today.

Daily Forex signals:

Additional daily and long-term entries are available for subscribers.

View our daily signal alerts https://www.maimar.co/category/daily-signals/

Subscribe to our daily signal service https://www.maimar.co/signals/

We wish you good trades and many pips!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2017 Maimar-FX.

www.maimar.co